Suncorp moved to pre-empt APRA crackdown

Suncorp Bank has revealed it started removing risk from its loan book two years ago, having anticipated a harsher approach from APRA may be forthcoming.

The bank’s head of intermediaries, Steven Degetto, told Mortgage Business that Suncorp has undertaken a program over the last two years to reposition its mortgage portfolio, with a focus on building strong risk management capabilities.

“We’ve really had that prudent lending approach and part of that has been the work we’ve done over the last two years,” he said.

“We review the level of business we write in a number of different areas, not just in investment lending, but certainly we continue to monitor the level of business we write be it investment, be it interest-only and otherwise.”

Mr Degetto said there is increasing industry awareness that the regulators are becoming more concerned about the heightened levels of investment lending – particularly in Sydney and Melbourne – and that lenders are responding.

“All of us in finance, be it our regulators, be it banks, be it aggregators or brokers – we’ve all got a job to ultimately ensure prudent lending,” he told Mortgage Business.

“We’re certainly encouraging people to have more and more conversations about that, particularly in the low interest rate, low growth environment.”

APRA and ASIC announced in December a widespread investigation into interest-only loans, high LVRs and investor loans in the Australian mortgage market.

Having recently been named Bank of the Year by Money Magazine, Mr Degetto said Suncorp’s focus will be on continuing to offer competitive products, a high level of service and enhancing its broker proposition over the next quarter.

“We’re busy rolling out our new banking platform which will give us even better customer service, and we’re embracing digital technology as well to try and be more agile and productive,” he said.

“We’re really in a unique position. We have the capability of a big bank, but we’re small enough to be agile and adapt seamlessly to any behavioural changes of our customers.”